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Anton [14]
3 years ago
8

In a reorder point problem where both demand and lead time are variable, demand averages 200 units per day with a daily variance

of 64, and lead time averages 6 days with a standard deviation of 1 day. What should the reorder point be for a 95% service level?
Business
1 answer:
Romashka [77]3 years ago
6 0

Answer:

~ 1561.235

Explanation:

Given :

Z=1.645

d = 200\ \\variance =64

Standard deviation can be determined by the \sqrt{variance }

Standard deviation=SD

=\sqrt{64}\ =\ 8

LT = 6\

σ = 8

Now using the formula

R\ =\ d \ *\ LT\ +Z\ \sqrt{LT^{2}\ +SD^{2} \ +\ d\ \sigma\ ^{2}  } \\\\Putting\  the\  respective\  value\  we\  get \\R=200 * 6 + 1.645\sqrt{6 * 8^2 + 200 *1^2}

R=1561.235

~ 1561.235

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